O'Bannon case ruling says cost of attendance enough for players

Appeals court in O'Bannon casestrikes blow to more compensationfor players in 'huge victory' for NCAA

By Marc Tracy and Ben Strauss, NEW YORK TIMES

September 30, 2015

The NCAA may restrict colleges from compensating athletes beyond the cost of attendance, a three-judge panel of the 9th U.S. Circuit Court of Appeals ruled Wednesday in an apparent victory for the college sports establishment as it fights efforts to expand athletes' rights.

As college football and, to a lesser extent, men's basketball have generated millions of dollars in revenue through broadcast deals and merchandise sales, some athletes have lobbied for greater financial compensation. The appeals court bluntly said that limiting compensation to the cost of attendance in exchange for use of the players' names, images and likenesses was legally sufficient.

The cost of attendance, typically several thousand dollars more than a traditional scholarship, accounts for the financial demands of additional activities like traveling home. It has been adapted by most larger schools.

The ruling upheld a federal judge's finding last year that the NCAA was, in the panel's words, "not above the antitrust laws" and that its rules had been too restrictive in maintaining amateurism. But the appeals panel threw out the judge's proposal that the NCAA allow colleges to pay athletes up to $5,000 per year in deferred compensation.

"Today, we reaffirm that NCAA regulations are subject to antitrust scrutiny and must be tested in the crucible of the Rule of Reason," the panel wrote in what is known as the O'Bannon case.

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"In this case," it added, "the NCAA's rules have been more restrictive than necessary to maintain its tradition of amateurism in support of the college sports market. The Rule of Reason requires that the NCAA permit its schools to provide up to the cost of attendance to their student-athletes. It does not require more."

Gabe Feldman, a professor at Tulane's law school, said: "I would say this is a huge victory for the NCAA. There was some question about the future of the amateurism model, and at least for now, a majority of this panel of the 9th Circuit has reaffirmed the NCAA's amateurism model and their definition of amateurism."

The case is known by the name of its lead plaintiff, former UCLA basketball star Ed O'Bannon.

In 2009, O'Bannon sued the NCAA for using his name and image in television broadcasts and video games. His legal team argued that players were required to sign waivers to allow the use of their likenesses but that because those contracts were worth billions of dollars, players were entitled to a piece of the revenue.

The NCAA countered that college athletes were amateurs and that anything amounting to pay for play would transform college sports into something unrecognizable, professionalizing the players and hurting the business model for college sports.

"These are not employees; these are students," Big 12 commissioner Bob Bowlsby said Wednesday. "This (ruling) has affirmed the amateur status of collegiate athletes."

While the appellate court's decision maintained college sports' new status quo, O'Bannon supporters saw several silver linings, most notably that it struck a blow to the NCAA's long-held amateurism defense.

"They specifically went in and said the NCAA violated antitrust law," said Sonny Vaccaro, a longtime NCAA critic who helped start the O'Bannon lawsuit. "That opens things up, and it's tremendous."

O'Bannon's lawyer, Michael Hausfeld, added that the ruling also explicitly tied athletics to academics more strongly.

"What has prevailed for the last century can no longer continue," he said. "Athletes are going to be have to be given more freedom, and the schools are going to have to exercise more responsibility over their academic experience."

Each side will have 14 days to request a rehearing in front of the full 9th Circuit or 90 days to appeal to the Supreme Court. Hausfeld and NCAA chief legal officer Donald Remy said they were weighing their options.